October West Texas Intermediate crude oil futures are in a position to finish higher for the week after a weak trade on Monday. The weakness at the start of the week was fueled by follow-through selling related to the escalation of trade tensions between the United States and China from August 23. By the end of the week, a cooling-off between the two economic powerhouses was one of the factors underpinning the weekly higher close.
The market was also supported by two huge weekly inventory drawdowns as reported by the American Petroleum Institute (API) on Tuesday and the U.S. Energy Information Administration (EIA) on Wednesday. Both events served as proof that the OPEC-led production cuts are working to trim U.S. support despite record output.
Trade Talks Resume
The United States and China verified on Thursday that they will resume trade talks on September 4. The news provided some relief to traders worried about a plunge in future demand growth.
President Trump said on Thursday the U.S. and China are set to have trade talks “at a different level.” Earlier in the day, China softened its stance saying it’s willing to resolve the trade war with a “calm attitude” and indicated it won’t retaliate against Trump’s new tariff threat immediately. China also said the Chinese and U.S. trade delegations have maintained “effective” communication.
U.S. Energy Information Weekly Storage Report